Fortinet Inc (NASDAQ:FTNT) topped the consensus earnings and revenue estimate in Q1, sending its shares over 5% higher on Friday.
The cybersecurity company reported Q1 EPS of $0.34, $0.05 better than the analyst estimate of $0.29, while revenue for the quarter came in at $1.26 billion versus the consensus estimate of $1.2B.
At the time of writing, FTNT is trading at $64.75 per share, adding to its gains so far this year.
The company's product revenue was $500.7 million, up 35% year over year, while service revenue of $761.6M rose 30% year over year.
"Revenue growth in the first quarter was 32% due to strong growth in both product and service revenue. With 35% product revenue growth, we continue to gain market share while being a leading product revenue company in the cybersecurity industry," said Ken Xie, FTNT's founder, chairman and chief executive officer.
Following the release, Morgan Stanley said it was a "picture-perfect start to the year" for the company.
"FTNT delivered another strong topline beat with billings +30% YoY. Increased demand for consolidation with security + networking budgets should enable durable growth," it said in a note. It has an Overweight rating and a $77 price target on the stock.
UBS, with a Neutral rating and a $70 price target on the stock, said it was a decent quarter with minimal macro pain.
"Against high expectations, Fortinet delivered 30%+ billings growth in 1Q, above expectations for 28-29% growth and driven in part by a greater than expected backlog drawdown (mgmt cited LSD%, and we estimate 3-4pts of growth)," said UBS
"Citing conservatism and room for discounting, mgmt left the full-year margin guide intact. Net, while 1Q was better than expected, the 2H setup still doesn't seem all that conservative, with the 21% billings guide and backlog commentary suggesting very little bookings growth deceleration throughout the year. We continue to view shares appropriately valued for teens billings growth and modest FCF margin expansion in CY24."